Gold rises Rs6,900 on global bullion strength

Gold prices in Pakistan rose sharply on Friday, tracking gains in the international bullion market, as softer crude oil prices eased concerns over prolonged inflationary pressures while a stronger US dollar limited the advance. The price of gold increased by Rs6,900 per tola to reach Rs460,336, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association. The price of 10-gram gold increased by Rs5,914 to Rs394,663. The latest increase came after gold prices had fallen by Rs3,800 per tola on Thursday, closing at Rs453,436. Friday's market move therefore more than reversed the previous day's decline and pushed the local price to a new level for the week. The increase in domestic gold prices broadly followed the international market, where bullion climbed to a one-week high and remained on course for its first weekly gain in four weeks. Spot gold rose 0.3% to $4,352.39 per ounce by 11:17 am EDT (1517 GMT), after touching its highest level since September 11 earlier in the session, as per Reuters. The metal was up around 0.2% for the week. Market conditions were also influenced by movements in crude oil prices. Brent crude fell for a third consecutive session, reducing some concerns that higher energy costs could keep inflation elevated for longer. Lower oil prices can ease inflation expectations by reducing pressure on transport and production costs. This, in turn, can affect investor expectations about interest rates and the broader demand for safe-haven assets such as gold. However, gains in bullion remained constrained by a stronger US dollar. A stronger dollar generally makes gold more expensive for holders of other currencies, limiting demand and putting pressure on dollar-denominated bullion prices. Despite the mixed signals from oil and currency markets, gold remained supported by demand for precious metals as investors assessed inflation, interest-rate expectations and broader global economic risks. All major precious metals were also heading towards weekly gains, indicating broader strength across the precious metals market. In the domestic market, silver prices followed gold higher. The price of silver increased by Rs300 per tola to Rs7,169. Pakistani rupee edged up Rs0.01 against the US dollar in the inter-bank market on Friday, closing at 277.25, compared with 277.26 a day earlier. Globally, the Japanese yen started weaker against the dollar and euro ahead of an expected Bank of Japan rate hike.